The Rise of Silicon China

An employee works at a factory which manufactures woven bags in Huai'an, Jiangsu province, China November 5, 2017. REUTERS/Stringer ATTENTION EDITORS - THIS IMAGE WAS PROVIDED BY A THIRD PARTY. CHINA OUT.

by Marion Laboure,Haiyang Zhang,Juergen Braunstein-Mareeg.com-CAMBRIDGE – In the future, if not already, the Silicon Valleys of artificial intelligence (AI) will be in China. The tech firms Xiaomi, Baidu, Didi Chuxing, Meituan, and Toutiao are all headquartered in Beijing. Alibaba, China’s e-commerce giant, is based in Hangzhou. And Tencent, a multinational conglomerate that

Zhang, HaiyangBraunstein, Jurgen

is investing heavily in AI, is in Shenzhen. Tencent already has a market capitalization higher than General Electric, and Baidu is larger than General Motors. China has a chance to lead in AI because it has managed to adopt new technologies very quickly. Just as millions of consumers in India went directly from no phones to smartphones – skipping landlines and flip phones altogether – Chinese consumers are now doing the same, and across a wide range of new technologies. For example, Chinese shoppers have skipped credit cards and gone straight to using e-payment platforms. While Apple Pay is struggling to gain momentum in the United States, Tencent is already facilitating more than 600 million cashless transactions every day.

Tencent and other Chinese firms’ massive centralized platforms give them an edge in AI research and development, by allowing them to generate and collect huge stores of data with which to train their machine-learning algorithms. These platforms also enjoy near-monopolistic power, which will help them monetize AI applications in the future.Moreover, Chinese firms are benefiting from Chinese cultural norms concerning privacy. In the West, privacy is regarded as a personal right to one’s own space and, by extension, to one’s data. This conception of privacy is good for individuals and, arguably, for society; but it is bad for AI developers, who face hurdles accessing the data they need to train their algorithms.

By contrast, in Chinese culture, privacy is viewed suspiciously, as a form of secrecy. It is assumed that an honest person should have nothing to hide from the public domain, so Chinese consumers are often happy to give up their data. Unlike in India, which has adopted a “right to information,” and the European Union, which has codified a “right to be forgotten,” there has not been any serious discussion about data privacy in China.

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